April 9, 2020
Richard Wolff on 3 Mistakes of Thinking the Problem is Monopolies, Not Capitalism

Richard Wolff on 3 Mistakes of Thinking the Problem is Monopolies, Not Capitalism

So it’s comforting, in that situation, to
get the idea from somewhere that this really isn’t a problem of capitalism as
a system but rather the problem brought in somehow from the outside: monopoly. A
situation in which competition among many companies gives way, in some way
we’re not quite sure about, to a domination by one or a small handful of
companies. And so the argument goes “we don’t have to be critical of capitalism.
We don’t have to think about an alternative system. No, no. We just have to
deal with this little detail: the monopoly problem. And if we can deal with
that, well, we’ll get back to a competition, to a competitive capitalism,
that is good.” There are three big mistakes involved in this way of
thinking, which is nonetheless very widespread, and very popular, more so now
than in quite some years. First mistake. Capitalism has been wrestling with the
problem of monopolies from day one. We have had repeated periods of monopoly,
they have eventually led to movements often of many people to destroy or
remove monopolies. We used to call that, in America, “trust-busting” or “anti-trust.” We
even have a department within the Department of Justice in Washington
devoted to anti-trust activities. Yeah, we’ve been waging battles against
monopolies over, and over again. And you know why? Because we keep having
monopolies over, and over again. Google is a monopoly. Amazon is the monopoly.
They’re all around us, companies that have effectively no real
competition. This is a problem that capitalism has always displayed and that
oughta lead you to wonder whether thinking about it as something we can do
away with isn’t maybe the best possible example of wishful thinking. The second
big mistake is to imagine that competition is some unmixed blessing.
It never was, and it isn’t today. A competitive market is a human
institution. Like every other human institution it has strengths, and flaws,
and weaknesses. To think of competition as some magical perfection is a silly
abnegation of your own rational capability to evaluate something. It’s
sort of advertising thinking. By that I mean the advertiser tells you what’s
good about the product they’ve been told to advertise. They don’t tell you what’s
bad about it. If you want to evaluate it, you don’t talk to an advertiser because
they only give you one side. The people who promote competition use advertising
logic. We’re not gonna do that here. Competition is no unmixed blessing. And
finally I’m going to show you that competition is itself the major cause of
monopolies. So that even if we ever got back to a competitive capitalism,
that all that would mean is we’re back in the process that produces monopoly as
it always has.

20 thoughts on “Richard Wolff on 3 Mistakes of Thinking the Problem is Monopolies, Not Capitalism

  1. The problem is not monopoly in itself, but who controls that monopoly, and what the monopoly power is used to do.
    In a capitalist monopoly with a view to profit maximisation, destroying all new competition ensures that profits are preserved. This is the problem of innovation slowing down in capitalist monopoly.
    Capitalist monopoly power can also be used to extract rents, because you no longer have to produce things at a price equivalent to its labour and exchange value. You can drive up the price and since there is no-one else who can make the stuff you make, if it is a necessity to survive, then this monopoly power will be used to price that thing way above its "real" price.
    The neoliberal wing rejoinder here is to say, let's break it up and increase competition. But the reason that the monopoly came about was because of market competition in the first place. A fully free market inevitably leads to concentration and monopoly as competitors are made insolvent by capitalism's "creative destruction."
    The statist rejoinder is to say, let's make this private monopoly property of the state. If the state is a democracy, this then places a degree of control in the hands of the citizens. But this is a far from certain outcome. It would be a just as likely outcome that the nationalisation process keeps the same bosses, keeps the same problems, but just changes who the profits accrue to.

    Finally, the democratic socialist rejoinder is to say, let's make this monopoly worker and citizen owned and controlled. This has never actually happened in macrocosm before, but there have been some microcosms that have come about like community owned infrastructure. The problem is that communities often do not have quite the tax base to be able to fully sustain big ticket infrastructure items by themselves, and so this model of ownership is also fragile and liable to outside pressure to devolve authority to the state or be privatised.

    Things like factories that have both community benefits (jobs and tax base) but also community harms (like waste and pollution) also present a tension that is not so easily resolved.

    Ultimately, the big question that liberals and conservatives have failed to address is not so much "why do monopolies keep cropping up" but "who controls this monopoly, and is this model of control answerable to the citizen?"


  3. So, what are the three mistakes of thinking the problem is Monopolies, not capitalism? I forgot.
    1. Ignoring the history of capitalism, everyone in a capitalist society ignores the history of capitalism, part of being a citizen of a capitalist society is to not know how and where cap'lism developed.

    Amazon made shipping overnight and this allowed the movement of products from the factories to be produced at a faster rate! Double the output of factory labor and factory orders. The capitalists are doing fine with the extra surplus they can now channel through Amazon, they move from production into circulation and back again at the click of a mouse. From a purchase to a sale at an instant.
    Worker productivity increased in all the factories producing what people buy through Amazon because Amazon developed a faster delivery process.
    I am sure the workers in all the factories are appreciative for the increase in the intensity of labor imposed on them by management and in China imposed on them by state worker management. Profits have risen but wages generally among all the workers in American manufacturing centers have remain stagnant for 45 years.

  4. Dr. Wolff, how can you really be this dense of a person to honestly believe human greed is a product of capitalism and capitalism only?


    Remind me again how you managed to know about the dangers student loans were going to be to an entire generation but still were able to take a paycheck.

    "Welcome class. So those student loans you took out? Yeah, you'll never be able to pay that back. It's capitalisms fault though, not my lack of ethical integrity as I gaslight"

  5. I don't know where Wolff lives but within a 10-15 mile radius I have:

    Whole Foods
    Sam's Club

    A whole host of specialty food stores and smaller stores/chains

    There is no "monopoly" for groceries in Mid-Michigan.

    There used to be a monopoly of a Flying J truck stop/Denny's, but now a Love's gas station is being built nearby.

    Literally no one cared the only restaurant that close was a Denny's and everyone knows Sophie's the next town over has better skillets.

    Despite every major pizza company in town, the locally owned Fabiano's has a geographic monopoly in the village I grew up in. Do we care? No. It's locally owned and operated with some of the best breakfast pizza.

    Wolff thinks people are too stupid to understand their local economy.

  6. Why is Wolff so damn angry all the time? Does he not know the Founders & Framers also spoke of monopolies, mercantilism, and tyrannical governments?

    Why do you outright lie to your viewers Wolff?

    I'm thinking about buying your book on Amazon though. Your website directed me there 😂😂😂

  7. Competition is absolutely an "unmixed blessing" for the consumert, resulting in the creation of the highest standard of living in all of history. And it's a stupid lie to claim that "competition leads to, or creates, monopoly. Everybody understands the basic truth that competition DESTROYS monopoly, to the benefit of the consumer. How can this guy get away with claiming to be an Economist?

  8. What about New York landlords? They own 2 to 50 apartments. Who can compete against him? Then it's usually their family, friends or the same tribe that owns building across nyc
    How to break up that monopoly?

  9. Once again Wolff has a lock on clear thinking. Monopolies are the symptom, not the disease. The disease is capitalism. We must "fix" the disease not trest tbe symptom because the disease will relapse.

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